Original Article by Korean Newspaper ‘Korea Economic Daily’, 18th Sep. 2022 https://www.hankyung.com/finance/article/2022091878871
See translation
As the stock market experiences rapid fluctuations, investment funds are pouring into EMP (ETF managed portfolio) funds, which are ultra-diversified products. EMP funds are products that maximize diversification effects by investing in multiple exchange-traded funds (ETFs). By investing in various types of ETFs such as stocks, real estate, and bonds, investors can aim for both profitability and stability.
According to financial information firm FNGuide on the 18th, a total of KRW 91.7 billion has flowed into 52 EMP (ETF managed portfolio) funds in Korea over the past year, while other themed funds experienced net outflows. With an AUM of KRW 1.69 trillion, the EMP fund market exceeded KRW 1 trillion.
The reason for the popularity of EMP funds is their ability to pursue relatively stable returns in volatile markets. EMP funds invest 50% of their total assets in ETFs and aim for a moderate risk and return with a target of 6-8% annual returns.
One of the advantages of EMP funds is that you can invest in various assets and countries with a single fund. EMP funds invest in a vast range of assets including stocks, bonds, real estate, infrastructure, precious metals, and commercial papers. They are also characterized by investing in several countries for diversification.
The average annual return of EMP funds in the past year was -14.62%, outperforming major domestic and foreign indices that fell more than 20% during the same period. The top-performing EMP fund with a return of 6.9% was Kiwoom UBS Global Multi-Asset EMP. Other EMP funds like Hyundai Global EMP (4.72%), NH-Amundi Global Alternative Investment Income EMP (4.23%), and Samsung MilDang Squirrel Global EMP (1.01%) followed behind.
Investment styles vary widely depending on the type of EMP funds.